• 
• 

Published on December 26, 2007

"The biggest problem we [manufacturers] face today is a rapid fall in the prices of electronic goods from very tough competition. All vendors are fighting for market share," said Thai Samsung Electronics deputy managing director Arnut Changtrakul.

As an example, he said retail prices for liquid-crystal-display (LCD) television sets had tumbled 20 per cent this year.

"The new challenge for all producers is to take urgent measures to reduce costs, because they must remain in line with price competition. This is made much more difficult by increasing business costs driven by continuous increases in fuel prices," he said.

Electronic-goods producers not only must reduce costs, but also need innovative ideas and methods - called "value innovation" or "value engineering" - to allow a reduction in expenditure without touching product quality, he said. This was the only means manufacturers had to survive the competition.

"We [Thai Samsung Electronics] have set up our own research and development centre at our manufacturing complex in Sri Racha and have been able to reduce our production costs US$50 million [Bt1.68 billion] per annum," Arnut said.

Costs and product quality have thus become basic factors for continued competitiveness.

Arnut said Samsung expected to end the year with sales of Bt17.95 billion, up 22.9 per cent from last year's Bt14.605 billion.

"We're proud of our outstanding achievement in terms of market share. Samsung holds the largest market share in many products, including 38 per cent of the LCD-television market, 24 per cent for flat-panel TVs, 46 per cent for side-by-side refrigerators, 15 per cent for two-door refrigerators and 35 per cent for computer monitors," he said.

"We've also become the market leader in many other products, such as home-theatre systems, MP3 players sold through non-IT distribution channels, top-loading washing machines and microwave ovens. This is a reflection of the steadily increasing acceptance and popularity of Samsung products among Thai consumers as a result of our research and development of quality products to serve the needs and lifestyles of today's consumers," he said.

A key driving factor for Samsung's success is the brand's combination of technology and design and the added value of quality that transforms its electrical appliances into stylish home furniture.

"Diversity in marketing strategies is another contributing factor to the success of Samsung, particularly the 'making premium more affordable' concept that makes high-quality products another alternative for consumers. Samsung can offer mix-and-match packages that serve as an incentive for consumers to buy premium products. The company has also explored new target groups and carried out product-placement activities to inspire target consumers," Arnut said.

Daizo Ito, the Panasonic Group's CEO in Thailand, said price-cutting competition would continue next year, especially for audio-visual products like LCD television sets - the price for which had fallen more than 30 per cent in the past two years.

Panasonic Siew Sales (Thailand), Matsushita's local sales and marketing arm, yesterday disclosed it was targeting sales of Bt21.26 billion for fiscal 2007 ending next March 31, up from Bt19.3 billion recorded in fiscal 2006.

The company achieved 11-per-cent sales growth in the first nine months of this fiscal year, from April to December.

"We expect the volume of the local audio-visual market to grow 10-15 per cent next year but don't expect any growth in terms of value. Price competition will be very tough," Ito said.

However, the price-cutting competition could ease later next year to allow significant growth of about 8 per cent in both volume and value.

"The market in Thailand for both audio-visual and electrical home appliances is expected to grow only 3 per cent this fiscal year, reaching Bt89.1 billion in sales," he said.

Panasonic Siew Sales (Thailand) is expected to achieve sales of Bt21.2 billion by next March 31, up from Bt19.3 billion in fiscal 2006.

Ito said Panasonic intended to become the leading player in all of its major product groups - plasma television sets, digital still cameras, air-conditioners and refrigerators - by 2009. The company is already the market leader in electronic shower heaters, fax machines, cordless telephones, projectors and electronic whiteboards.

"We will also complete a facelift in all of its design functions of our LCD and plasma television sets, following the popular designs of our conventional Viera wide-screen television sets," Ito said.

Panasonic expects to increase its share of the LCD-television market from 15 per cent to about 20 per cent in fiscal 2008.

"The company was able to increase its share of the market for air-conditioners from 21 per cent to about 22 per cent earlier this year and expects to reach 23 per cent by next March. Likewise, its share of the refrigerator market has recently risen from 18 per cent to 19 per cent and is expected to reach 22 per cent by next March. This will make Panasonic the market leader in both air-conditioners and refrigerators," Ito said.

He said the company would focus on security systems next year, such as its closed-circuit television and Internet cameras.

Toshiba Thailand is confident that demand for electronic products will improve next year. It expects its sales in fiscal 2007 ending next March 31 to grow 12 per cent to Bt5 billion.

Toshiba Thailand president Hidenori Matsui said he expected next year's highest demand would be for information-technology (IT) products and that sales of LCD television should double.

"Thai consumers will buy television sets with larger screens, as retail prices will gradually come down. There will be greater demand for two-door refrigerators than for one-door models, and consumers will demand larger automatic washing machines," Matsui said.

Toshiba has also introduced bidets as a new product line. The automatic sanitary-ware devices are imported from the company's plant in Japan and categorised as small home appliances.

Matsui said the market for bidets had good potential, because competition was low. Priced at Bt39,900 each, the company plans to sell them to corporate clients, including hospitals, hotels and office buildings.

Toshiba also plans to introduce other new products next year, such as personal-digital-assistant telephones.

Although burdened with higher prices than its competitors, Toshiba plans to focus on developing and manufacturing "green" and energy-saving products. Home appliances contribute 60 per cent of Toshiba Thailand's revenue, followed by IT products at 30 per cent and audio-visual goods at 10 per cent.

Tomorrow: The hotel industry.

Kwanchai Rungfapaisarn,

 Nitida Asawanipont

 The Nation